Do I need a Trust?

You’ve spent time deciding the ins and outs of your life cover; you’ve carefully thought about how much and where you want the claim to go. In years to come, that claim is then ready to be paid out and your family find 40% of the money has to be paid to inheritance tax.  

Why? Because your insurance policy wasn't written into trust.

You may not realise you need a trust, you’ve arranged your plan and think that’s all there is to it. It seems silly to think your protection needs protecting, but in reality, a trust is an important essential to your life insurance, so let us explain why and how easy it is to be arranged:

Tip: When you take a policy out through AssureLife,  it is written into trust for free.


What is a trust?

A trust is a legal arrangement allowing the the owner of the property to transfer legal ownership of that property (i.e a life insurance policy) to another person or company. It ensures the right money is paid to the right hands at the right time.


How does a trust work?

- The proceeds of the plan are usually used to benefit somebody else, usually surviving members of the family, or sometimes business associates. The plan holder can name the persons who they wish to benefit from the plan in the trust document:

- The plan holder who is declaring the trust is usually called the donor or settlor. If the plan covers two people, the plan holders will be joint settlors/donors.

- The persons who are, or may become, entitled to receive the plan proceeds are called the beneficiaries. Discretionary trusts allow changes to beneficiaries to be made later.

- The trustees are the people who control the trust property, in this case the life assurance plan. They make sure the terms of the trust are carried out.


Why is a trust important?

- It makes sure the money paid out from the plan goes directly to the people you want it to benefit from.

- The life insurance company can usually pay a death claim quicker than if it were not put in trust as it avoids the probate system, which can take anywhere between 3 months to 2 years to resolve.

- The money the plan pays out will be free of inheritance tax.


Are there drawbacks to a trust?

- As it is a legal document, a trust could cost to be written, similar to a will.

- It can also be complicated to set up, especially if you are not given any help from an expert. 


At AssureLife, we understand the importance of knowing your policy will be paid to the right people at the right time. If a policy is taken out through us, we will do all the work for you, without you  having to pay a penny.

For more information about our trust writing service, speak to an advisor today:  0113 895 0030 or email [email protected]

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